Science

Georgia man pleads guilty to stealing over $3 billion in Bitcoin

Earlier today, the US Department of Justice revealed information on what was then the largest cryptocurrency seizure in US history (the second-largest financial seizure ever at the time). The seizure occurred during a previously undisclosed raid on a Georgia residence in connection with a 2012 wire fraud scheme conducted via the infamous, now-shuttered dark web blackmarket, Silk Road.

Per an official press release, federal authorities executed a search warrant at James Zhong’s home on November 9, 2021, where they discovered an underground floor safe containing with gold and silver bars, along with a single-board computer stored within a popcorn tin and buried beneath blankets in a bathroom closet. On the computer was a digital wallet containing over 50,600 Bitcoin—then worth $3.36 billion. Zhong pled guilty to federal charges of wire fraud on November 4, a crime that carries a 20 year maximum prison sentence. The DOJ’s raid remains its second-largest cryptocurrency seizure ever after this year’s recovery of $3.6 billion in Bitcoin from Ilya Lichtenstein and Heather Morgan, a married couple with a fascinating backstory. The massive amount stems from a hack of the still-active cryptocurrency trading company Bitfinex in 2016.

From roughly 2011 to 2013, Silk Road operated on the dark, or “deep,” web as a blackmarket for all manner of illegal drugs, stolen goods, and illicit services. It utilized Bitcoin transactions for both vendors and customers to remain virtually anonymous. To access the website, visitors needed to download Tor, basically an incredibly secure VPN tool for online browsing and communication, which then kept one’s identity hidden. From there, users are also able to access websites that aren’t indexed on standard search services such as Google—for a couple of years, this included Silk Road.

Unsurprisingly, the US government didn’t look kindly upon this anarcho-libertarian equivalent of a supermarket. The DOJ eventually arrested the site’s founder, Ross Ulbricht, and a jury unanimously sentenced him to life in prison in 2015 for, among other things, attempting to hire a hitman at one point. Zhong, for his part, is scheduled to be sentenced in February 2023.

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